Developer interested in unfinished Norwich hotel

A developer is close to taking over a partially completed Norwich hotel near Interstate 395 and will seek tax incentives to help finish the project, Norwich Community Development Corp. Executive Director Bob Mills said Thursday.

A developer is close to taking over a partially completed Norwich hotel near Interstate 395 and will seek tax incentives to help finish the project, Norwich Community Development Corp. Executive Director Bob Mills said Thursday.

But the incentives may not be forthcoming, a state official said.

Mills did not give the name of the developer but said the developer is near to “closing out” the project’s original developer and assuming ownership. The developer will seek state approval for tax-increment financing, which would permit borrowing against the property’s future revenue stream, Mills said.

Pamela Hartley, spokeswoman for Connecticut Innovations, which oversees the tax-increment financing program, said a consultant representing the developer had a discussion with representatives of her office but the developer is not likely to qualify for the financing. The developer has not filed an application, she said.

“His needs don’t seem to fit with the program,” Hartley said. “Barring future discussions, he’s not likely to get it (the financing).”

The developer has met with Mayor Peter Nystrom, Mills said during a board of directors meeting Thursday at NCDC headquarters in downtown Norwich. Speaking after the board meeting by telephone, Nystrom said he and Greater Norwich Area Chamber of Commerce President Ben Lathrop met with the developer several weeks ago. The developer is based outside of Norwich and has national holdings, Nystrom said.

“They have a very strong interest in the site,” Nystrom said. “They’re very committed to making something happen.”

The building’s prominent location and its lack of completion is hurting Norwich’s image, Nystrom said.

“Having a building vacant on that site is not helping the city,” he said. “We want to see some vibrancy on that site.”

Nystrom declined to name the developer.

“They want the honor of having a press conference and putting themselves forward,” he said.

The developer is also looking to assume ownership of a hotel property in Wallingford, Mills said. The developer is planning additional meetings with the mayors of Norwich and Wallingford as well as state officials, Mills said. A proposal is to be presented to the NCDC board in about two weeks, he said.

Costs of the Norwich project are rising because of weather damage to the building, which is near to the interstate’s Exit 80 and not far from the Holiday Inn Norwich, Mills said. Among the developer’s plans is to add new windows, Mills said.

“He’s being very creative,” Mills said.

Norwich Building Official James Troeger couldn’t be reached for comment Thursday.

The Wallingford property is in physically better shape, Mills said.

Partly because of declines in spending at Foxwoods Resort Casino and Mohegan Sun, Norwich hotels are struggling to fill rooms, Mills said.

The property, at 154 Salem Turnpike, was to be a 113-room Hampton Inn & Suites Hotel, but was not completed. The Bank of Smithtown, N.Y., moved to foreclose on the site in 2010, filing papers against PRA Development and Management of Philadelphia and 10 contractors and suppliers that worked on the site. Court documents filed with the Norwich city clerk showed the action centered on a $10.7 million mortgage dated July 2007.